On 10/1/70 the DJIA was 838.92. On 4/1/82 it was 811.92. That was a period of high inflation and rising interest rates. The term stagflation was used during that period.
Once the current decline bottoms it will be interesting to see what happens. We don't have the unemployment numbers of the '70s, but that is because of how many have left the workforce. Additionally the federal deficit has ballooned.
Another long period of malaise? We certainly have a “Crisis of Confidence.”
2006 Triton TR196 w/ 200 Optimax \ 2021 AlumaRyder 1860 w/ 200 Rotax
Where are we headed? 100K eventually. Between now and then, I'm gonna say worst case mid 20K. Gonna take a significant event to take out the covid lows, like a nuclear weapon going off. I think there's a good change we kind a just hang around in a 10 or 20% range for a year or two. That would be good in my opinion. Consolidate the last few years of gains before blasting off to new highs. The longer we stay in this period the better, money supply is shrinking, deficits are reducing, balance sheets are reducing.
Thanos was the hero
I'll choose "C" and go with 27-28,000 range. Money has to go somewhere, it doesn't disappear.Originally Posted by boneil
Yes, the Feds can reduce the $ in circulation, but they won't do anything significant right away.
Simply drying up the support will do plenty, along with the interest rate hikes, etc. Patience.
I think it is going to depend on where interest rates are. If the fed funds rate gets close to 4% then you have an alternative to equities for some portion of your portfolio. I could see us being flat oe down for the next 2 years.
Tell that to the crypto gamblers.
2006 Triton TR196 w/ 200 Optimax \ 2021 AlumaRyder 1860 w/ 200 Rotax
The cash didn't disappear. It was moved from one pocket to another, at the time of currency purchase.Tell that to the crypto gamblers.
Reminds me of the shell game, long ago. Quite the hustle, guaranteed to evaporate your investment.
I think the predictions stated are overly optimistic. We are going through a transformational period. Markets hate uncertainty, and the policy makers are clueless.
I see a low below 16000 and then a sideways motion for many years.
2006 Triton TR196 w/ 200 Optimax \ 2021 AlumaRyder 1860 w/ 200 Rotax
Dow 16000 will put us in a depression. Pensions will collapse, retirees will be standing in bread lines. Our economy will be in shambles from failing companies. Our leaders will be fired before that happens.
Yes, there will be pain whether you want to call it a depression or deep recession. Unfortunately relief isn't in sight until at least January 2025, so there is plenty of time to inflict even more damage.
Too much money flowed into stocks because of low interest rates. Unwinding that will create a major pull back that has only just begun.
2006 Triton TR196 w/ 200 Optimax \ 2021 AlumaRyder 1860 w/ 200 Rotax
IMO, the stock buybacks using tax cut savings and corporate bond purchase did more to inflate the markets.
However, it was done, it's now about to be undone. Hide, run, cover up ... doesn't matter, it's coming for us.
You are correct - it doesn’t matter why.
I will add one more stick to the pile of problems. There are many in the stock market that have not been through an ugly market. The pandemic pull back was too brief to have caused enough pain and fear. The final bottom will come after there are massive mutual fund redemptions.
2006 Triton TR196 w/ 200 Optimax \ 2021 AlumaRyder 1860 w/ 200 Rotax
Yep ... even if many only pull 10-20% for expenses, debt load, etc. it's gonna make a difference.
For anyone in a solvent position, it's all irrelevant. Stocks are stocks, bonds are bonds, cash is cash.
Your property(s) aren't worth any less due to a piece of paper. Stay the course and it will resurrect.
The folks who get in trouble, and don't recover, are those who retract, change up, etc. All negative.
You just touched on another problem. I saw something yesterday or Friday that only 40% of the population earns enough to meet monthly expenses. The rest are taking on more debt or just not paying bills.
Another massive bailout is looming.
2006 Triton TR196 w/ 200 Optimax \ 2021 AlumaRyder 1860 w/ 200 Rotax
Watch Europe closely. They played a large part in 1929.
I am starting to see threads on reddit where people are talking about taking out interest only mortgages. That is not a good sign.
A good friend is a mortgage company executive, we're all watching him closely.
Ensuring he doesn't drive toward the Skyway Bridge, the prison kill zone, etc.
I'm still sick the government thought it was a good idea to allow it, yet again.
If you see another “Pick-a-Payment” negative amortization product like what Wachovia had the stuff is about to hit the fan big time.
2006 Triton TR196 w/ 200 Optimax \ 2021 AlumaRyder 1860 w/ 200 Rotax
Reverse mortgages are another good indicator, rarely watched.
Most focus on delinquent payments, etc. Which is far too late.
I don’t know enough about reverse mortgages to make an informed comment, but they sound like a typical Wall Street scheme. Have a pitch with some appeal (here’s a way to stay in your home) that has a fundamental flaw (you are in a house that you really can’t afford to be in.). While there must be some situations where it makes sense there are going to be many that have terrible outcomes.
2006 Triton TR196 w/ 200 Optimax \ 2021 AlumaRyder 1860 w/ 200 Rotax
In our situation, they're actually perfect. We have no intention to leave anyone very much ... checking account balance, whatever else isn't consumed, or gifted. Thus a reverse is fine. If we're 70 and still in a traditional home, debt-free, moving isn't going to happen. We can reverse, collect payments, they can have it when we're both gone. And they DO have to wait it out ... five years, ten years or 30 years. It's like any other annuity, just tied into real estate.
Reply With Quote